Embattled VW chief faces US public for first time

Volkswagen chief executive Matthias Mueller will face a skeptical US public on Sunday for the first time since American regulators accused the German automaker of cheating emissions tests.

VW's "apology tour" is expected to be a sharp contrast from the exuberance displayed by its competitors when the Detroit auto show formally opens Monday amid record-breaking US sales.

Mueller is set to speak at an invitation-only media reception in a Detroit restaurant Sunday night before heading to Washington for talks with political leaders and regulators amid accusations that the company is obstructing the investigation into the deepest crisis of its history.

VW was tight-lipped about Mueller's schedule, but the Environmental Protection Agency (EPA) has said he is scheduled to meet with Administrator Gina McCarthy on Wednesday.

Mueller, who took the helm at Volkswagen after US authorities uncovered the scandal in September, has said he will apologize during his first official trip to America but also "look forward with optimism and confidence."

The Wolfsburg-based group admits it installed software in around 11 million diesel cars of its VW, Audi, SEAT and Skoda brands worldwide that helped them evade emissions standards.

The so-called defeat devices turn on pollution controls when the car is undergoing testing, and off when it is back on the road, allowing it to spew out harmful levels of nitrogen oxide.

The affair severely damaged Volkswagen's reputation and spawned to a host of different investigations in several countries.

On Monday, the US government sued the carmaker for installing defeat devices on nearly 600,000 of its VW, Audi and Porsche vehicles sold in America between 2009 and 2015.

The complaint alleges that Volkswagen not only intentionally violated clean-air regulations but also obstructed the investigation by concealing facts and providing misleading information, despite the company's public pledges of cooperation.

- Penalties could top $20 billion -

The attorneys general of New York and Connecticut, who are leading a separate probe by more than 40 US states, on Friday accused the carmaker of hiding behind German privacy laws in refusing to turn over emails and documents.

"Our patience with Volkswagen is wearing thin," warned New York Attorney General Eric Schneiderman.

Civil penalties in the US could run well above $20 billion. Volkswagen also faces a costly recall and at least 650 class-action lawsuits from disgruntled US customers.

Meanwhile, the EPA and the California Air Resources Board are still reviewing VW's plan to recall the nearly 500,000 affected 2.0 liter cars, and the company must submit another plan for some 85,000 affected 3.0 liter cars by early February.

"The consumers and their own customers especially are willing to accept a reasonable amount of time for the investigation to occur and to come up with a fix, but as we continue to get further and further along from when the scandal broke the tolerance for that waiting period is getting thinner and thinner."

Volkswagen's global sales declined in the wake of the scandal with the core brand VW suffering an annual drop of five percent to 5.82 million.

Overall VW group sales in 2015 reached 9.93 million, two percent less than a year ago, and the first fall since 2002, according to figures released on Friday.

Mueller still hailed the numbers as "an excellent result given a difficult situation in certain regions and for diesel in the last quarter."

Even before the emissions scandal forced Volkswagen to suspend the sale of its diesel cars, the VW brand had been struggling in the United States with an aging model lineup while competitors posted record sales.

Vehicles bearing the Volkswagen badge have captured just three percent of sales in the world's second largest auto market, and the company had been counting on a major expansion in the country to achieve its now-shelved goal of overtaking Toyota to become the world's largest carmaker.